US embassy cable - 04HARARE199

UNCLAS SECTION 01 OF 02 HARARE 000199 
 
SIPDIS 
 
SENSITIVE 
 
AF/S FOR SDELISI, LAROIAN, MRAYNOR 
NSC FOR SENIOR AFRICA DIRECTOR JFRAZER, DTEITELBAUM 
LONDON FOR CGURNEY 
PARIS FOR CNEARY 
NAIROBI FOR TPFL 
 
E.O. 12958: N/A 
TAGS: PGOV, PHUM, PTER, ASEC, ECON, EAGR, ZI, Parliamentary Affairs 
SUBJECT: PARLIAMENT PASSES LAND ACQUISITION ACT AMENDMENTS, 
ANTI-MONEY LAUNDERING BILL 
 
REF: (A) 03 HARARE 2451 (B) 03 HARARE 2421 (C) HARARE 
 
     1506 AND PREVIOUS 
 
1.  (SBU) SUMMARY: After considerable debate, Parliament on 
January 28 passed a controversial Land Acquisition Amendment 
(LAA) Bill.  The bill scales back due process protections for 
property owners and expands the categories of properties that 
may be confiscated under the government's land reform 
program.  Passing on January 29 without partisan bickering 
was the Bank Use Promotion and Anti-Money-Laundering (AML) 
Bill, which boosts the state's investigatory powers in the 
financial sector.  Parliament adjourned January 29 and is 
scheduled to reconvene March 23.  END SUMMARY. 
 
2.  (U) The LAA removes a requirement of actual notice being 
served on a property owner or other parties in interest 
(e.g., mortgage holders), instead requiring only that notice 
be published in the government's official gazette.  It 
eliminates the option previously available under law for a 
property owner to avoid compulsory acquisition of one 
property by offering another, and invalidates all such 
arrangements previously agreed to.  The Act eliminates 
limiting criteria relating to the nature of the land 
compulsorily acquired, effectively expanding the scope of 
land reform to encompass not just rural farm land, but also 
(1) agro-industrial properties, (2) plantations of timber, 
tea, coffeee, citrus fruit and sugar cane, (3) components of 
export processing zones and properties operating under permit 
of the Zimbabwe Investment Center, and (4) approved 
conservancies.  In the same vein, it repeals the Hippo Valley 
Agreement Act, whereby the GOZ had granted certain 
agricultural concessions in the Hippo Valley.  (Comment: The 
South African conglomerate Anglo-American is a major investor 
in Hippo Valley and appears to be targeted by this 
provision.)  The Act also removes as a defense to compulsory 
acquisition the fact that the designated property is the 
owner's only piece of land. 
 
3.  (SBU) The LAA passed after some procedural irregularities 
and a relatively quick but contentious debate.  Bills are 
required to be "gazetted" (officially published) at least 14 
days prior to their introduction to the floor.  After being 
unavailable to interested parties, the LAA first appeared in 
a special gazette issued December 5 but dated November 28, 
and was under consideration by the Parliament less than 14 
days after the date of actual publication.  The Parliamentary 
Legal Committee issued an adverse report on the bill by 
mid-December, finding the Act provisions to violate Section 
16 (dealing with compulsory acquisition of property) and 
Section 18 (guaranteeing protection of law) of the 
Constitution.  Debate on the bill was uncharacteristically 
sharp and detailed, with Minister for Agriculture Joseph Made 
and Minister of Justice, Legal and Parliamentary Affairs 
Patrick Chinamasa figuring prominently.  Invoking a law 
denying MPs with direct pecuniary interest in legislation the 
opportunity to speak or vote on the legislation, MDC Shadow 
Minister for Legal Affairs David Coltart moved on January 21 
to have all MPs who had been allotted farms under the GOZ's 
land reform be excused from debate and the vote on the bill. 
He presented a list of MPs with farms (including several 
alleged multiple farm owners) but his motion failed after a 
lengthy furor involving chaotic shouting matches and 
temporary adjournment. 
 
4.  (U) The AML Bill passed without significant debate just 
one day after its second reading (three readings are required 
before passage).  By its own terms, the law is intended to 
steer more cash into the national banking system and to 
enhance state powers to suppress money-laundering.  The Bill 
establishes a special investigative unit under the Reserve 
Bank Governor to implement the law with support from the 
police.  It prohibits settlement in cash of debts exceeding 
five million Zimdollars (approx. USD 1,400) and requires 
parastatals and traders to bank surplus cash.  It imposes 
record-keeping requirements and limits on fees and cash 
withdrawals at financial institutions.  The Unit Director is 
empowered to require institutions to disclose any records and 
information on any transaction.  Inspectors or police are 
empowered to search any person and to seize any cash 
suspected to be held unlawfully, subject to a subsequent 
hearing before a magistrate.  Parliamentary staff told us 
that the Budget and Finance Committee played a meaningful 
role in the bill's crafting, marching in a small army of 
banking and finance experts that convinced the Minister of 
Justice (and Acting Finance Minister) to make constructive 
changes before its passage.  We have conveyed the Bill's full 
text to AF/S and to Treasury. 
 
5.  (SBU) COMMENT: At least two impetuses lie behind the LAA. 
 First, it retroactively "legalizes" GOZ acts in implementing 
land reform that heretofore were unlawful -- essentially 
invalidating innumerable court orders held by evicted 
property holders.  In this regard, it discards the GOZ's 
assertion at Abuja and elsewhere that farm owners may retain 
one farm.  Second, it signals commencement of the next phase 
of GOZ nationalization of Zimbabwe's assets: indeed, legal 
proceedings and forcible evictions of owners of 
agribusinesses, conservancies, and safari operators already 
are vigorously underway.  Real parties in interest behind the 
evictions usually conceal their identities but uniformly have 
turned out to be ruling party cronies when known.  Following 
on the heels of December's executive order permitting seizure 
of agricultural equipment from former property owners (ref 
B), the LAA's passage ironically evinces a heavily legalistic 
dimension of the GOZ's evolving campaign to bring the 
country's assets under the effective control of the ruling 
party elite.  The parliament's prominent role in this 
reflects its growing significance as a debating forum and 
institution in form, but in substance it remains a reliable 
appendage of the ruling party. 
 
6.  (SBU) COMMENT (CONT'D): The GOZ's war on corruption is 
the publicized impetus behind the AML Bill.  In addition, we 
understand that the need to extend a few statutory 
instruments that were about to expire and a priority on 
dealing with foreign currency pricing of services added some 
urgency to the bill's fast track.  Perhaps most salient, 
however, was the GOZ's desire to bring more within its 
control the considerable segment of society here that 
operates outside the sometimes draconian and often 
nonsensical vagaries of Zimbabwe's formal economy.  The 
enhanced powers afforded the State (liberalized warrantless 
searches, for example) can be expected to be used against 
selected business rivals and political opponents of ruling 
party principals, both inside and outside the party. 
SULLIVAN